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Performance Evaluations:

Best Practices –Reduced Liability

© Copyright 2011Biddle Consulting Group, Inc.All Rights Reserved

Jim Kuthy, Ph.D.CritiCall Pre-Employment Testing Software

National Academies of Emergency

Dispatch

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911

Jim Kuthy, Ph.D.

jkuthy@biddle.com

Biddle Consulting Group, Inc.

193 Blue Ravine, Ste. 270

Folsom, CA 95630

800-999-0438

Contact Information

Dispatcher/Calltaker Pre-Employment Testing Software

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911 A little about Jim Kuthy…

� Masters and Doctorate Degrees in Industrial &

Organizational Psychology

� Eighteen years of experience in the employment

selection field

� Served in public safety in California & Nevada

� Designed/Validated selection and promotion

systems for dozens of employers, including those

that have been successfully defended in court or

passed review by federal agencies

� Author of Biddle Consulting Group’s CritiCall Pre-Employment Testing Software

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911 Small Print

The opinions expressed during this

presentation are my own, and do not

necessarily reflect those of

Biddle Consulting Group, Inc. or CritiCall Pre-

Employment Testing Software

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911 Presentation Outline

� What are Performance

Evaluations

� Why do them?

� What to measure and how

� Minimizing potential

liability

� Hints for a successful and

defensible process

� Selected references

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911 Wikipedia

� A performance appraisal , employee appraisal , performance review , or (career) development discussion is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor.

� http://en.wikipedia.org/wiki/Performance_appraisal

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911 Is this really an issue?

� Survey of 195 CEOs of small businesses

� Almost half had been sued by an employee

� About one third of those suits were related

to wrongful discharge

� TEC and Inc. Magazine survey, 1995

http://www.inc.com/magazine/19960401/1632.html

� The median jury award for wrongful

terminations in 1996 was about $206k� Goldberg, 1997

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911 However, Please Keep in Mind

� Many wrongful termination claims we see in the headlines are often just claims!

� Employers have the right to terminate employees based on an appraisal of employees’ poor performance

� According to the Fifth U.S. Circuit Court of Appeals� “In order to properly manage its business, an employer

must be able to supervise, review, criticize, demote, transfer and discipline employees. Not all of these processes are pleasant for the employee. Neither is termination.” The court went on to say, “An employer will not be held liable for exercising its legal right to terminate an employee, ‘even though he is well aware that such [action] is certain to cause emotional distress.’”

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911 Claims of Wrongful Termination

� Until recently, performance evaluations have not been the basis of litigation unless there was also a Civil Rights claim

� More recently, however, there has been a rise in wrongful termination lawsuits due to an erosion of the “employment-at-will” doctrine in many jurisdictions

� Many of the more recent wrongful termination suits rely on contract theory or violation of “public policy”� Violation of public policy means “terminations are unlawful if

they are not consistent with the will of the people”

� Tomlinson & Bockanic, 2009

� Standards for “at will” employment and public policy differ substantially between states� Check with your legal counsel for details in your jurisdiction

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911 No Surprises

� Feedback and/or guidance should be provided to employees on a regular basis

� Feedback is much more effective when given closely to the event being evaluated

� Make certain your feedback is in line with the standards set by the organization

� Formal performance evaluations should be a summary of the performance feedback management has been providing to the employees over time

� The results of a performance evaluation should not come as a surprise to an employee

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911 Define the Purpose

� A good prerequisite to designing an appropriate and effective evaluation system is to decide what is to be measured and how that information is to be used� (1) Statement of purpose; (2) types of activities to be measured; and (3) a draft of the analysis plan

� Evaluations used for multiple purposes (e.g., pay, retention, development) are often less informative/effective than those with specific purpose� It is better to have different evaluations for different purposes, than it is to have one evaluation for more than one purpose

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911Defensible Practices

Barrett & Kernan, 1987

1. Conduct a job analysis to identify characteristics for successful job performance.

2. Incorporate those characteristics into the rating instrument.

3. Train supervisors to use the rating instrument properly.

4. Have formal appeal mechanisms available, as well as a review of review of ratings by upper-level personnel.

5. Carefully document the evaluations and reasons for any termination decisions.

6. Provide performance counseling or corrective guidance to assist poor performers.

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911 Job Analysis

� Base your performance appraisal

process on an analysis of the job

� Objective of a job analysis is to define a job

“in terms of the behaviors necessary to

perform it” (Cascio, 2005)

� Most defensible performance appraisals

are based on a content-related

approach, which emphasize focusing on

observable aspects of work performance

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911 What to Measure

� Evaluate employees’performance of work-related tasks� Focus on more than just calltaking

� Define the task performance in terms of observable behaviors or observable outcomes� Measurement of non-observable

characteristics, such as attitude, is very difficult to defend unless defined in terms of observable behavior

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911Observable Job Performance

Behavior Examples

� Public Safety Dispatcher/Calltaker� Behavior: “Answer and/or initiate phone calls,

radio transmissions, and/or or other communications in a timely fashion.”

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911Observable Job Performance

Behavior/Outcome Examples

� Public Safety Dispatcher/Calltaker� Behavior: “Analyze and determine

appropriate response based on information presented (such as which unit/agency to dispatch and/or what resources are needed).”� Observable Outcome: “Appropriate units are

dispatched.”

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911 Rating Scales

� Create one or more set of rating-scale metrics to be used across performance dimensions, when appropriate� E.g., Unacceptable, Somewhat Unacceptable, Acceptable,

Highly Acceptable, Outstanding

� Define each level so that all raters are using the same “frame of reference”

� Of course, some behaviors are simply “acceptable” or “unacceptable”

� Offer those choices only when appropriate

� We suggest not using rating scales that refer to “average performance” or “meets expectation,” since there are difficult to define or codify

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911Example of Acceptable or

Unacceptable Performance

� Public Safety Dispatcher� “Change/adjust voice-recording back-up tapes

and/or memory devices”

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911Define Each Point on the

Rating Scale (Example)

� Unacceptable: Employee fails to meet the stated performance criteria.

� Somewhat Unacceptable: Employee usually meets the stated performance criteria, but occasionally fails to do so.

� Acceptable: Employee consistently meets the stated performance criteria.

� Highly Acceptable: Employee consistently and clearly exceeds the stated performance criteria.

� Outstanding: Employee consistently far exceeds the

stated performance criteria.

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911 Anchored Rating Scales

� Anchors are examples of effective and ineffective behaviors at various performance levels that assist raters with their ratings

� A job analysis can be used as the basis for creating “anchored rating scales” to be used when evaluating employees

� To develop examples of effective and ineffective behaviors, have job experts identify critical incidents where performance on important tasks makes a difference � Then use behaviors related to those incidents to develop “anchors” for various points on your rating scale

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911 Rating ScalesExample

�UnacceptableAnchors: Example(s) of “Unacceptable” behaviors

�Somewhat Unacceptable�Acceptable

Anchors: Example(s) of “Acceptable” behaviors

�Highly Acceptable�Outstanding

Anchors: Example(s) of “Outstanding” behaviors

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� Raters should be required to provide an

explanation about observable behaviors to

justify the ratings they give for above or below

“acceptable” levels

� Just checking boxes is less defensible

� Providing an explanation helps the reader to

understand why the rating is justified

� It also provides feedback to the employee

� Forces the rater to focus on observable behaviors

� Litigation frequently takes years to wind through

the courts… memories fade with time

Rating Scales

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911 Train Your Raters

� Note: Only those who have had an opportunity to observe the employee should be allowed to rate that employee

� Agreement among multiple raters has been a critical component for success in court

� Werner & Bolino, 1997

� Frame-of-Reference training can help insure consistency� Train a common set of standards against which employees are evaluated, based on the job analysis

� Emphasize the multidimensionality of work performance

� Provide evidence that the training was effective

� Periodically reinforce training

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911 Leniency Rater Error

� Leniencymeans rating an employee more favorably than his/her performance warrants

� Leniency in performance appraisal ratings is generally not a good idea

� For a variety of reasons, supervisors are frequently overly lenient in their ratings� Hold raters accountable for their ratings

� Require documentation, including examples

� Train raters to keep a record of worker behaviors

� Conduct role-playing exercises

� Key to successful training is not to train supervisors to be less lenient; it is to train them to become more accurate

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911 Appeals

� Courts look favorably when employers offer an appeals process to those who received poor performance evaluations

� Express this process to the employees

� Both in advance and at time of evaluation

� Document employees’ acknowledgement of the appeals process

� Both in advance and at time of evaluation

� Make certain appeals process works as “advertised”

� Document the process and the outcome

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911 Management Review

� Some courts appear to be more likely to rule in employer’s favor when performance evaluations are reviewed by management to prevent bias by an individual supervisor

� Thoroughness of the review can be demonstrated by having upper management make notes or otherwise indicate they have read and agree with the contents� More than just a signature, please!

� Be sure to review carefully… employers can be found liable when employees are terminated based on the personal bias of a supervisor

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911 Documentation

� Careful documentation is important for evaluations of both poor and successful employees

� Make clear and unambiguous documentation

� Inform employee of that information

� Obtain documentation of receipt of that information� Rater and Ratee should sign evaluation

� Timeliness can also be important

� Some courts have suggested that explanations of events made long after the event has taken place are given less weight than those written contemporaneously

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911 Provide Counseling/Guidance

� Courts appreciate when counseling and/or guidance is offered to employees to address performance deficiencies

� Offer training or counseling as soon as possible once a problem becomes noted – be consistent

� Corrective counseling that is ignored by a problem employee or which does not result improvement provides some evidence the employee is not qualified to hold the job

� Allow sufficient time for improvement, if appropriate� Balance the need for terminating an employee quickly with the

sense of fairness in allowing an employee to improve

� However, know when to say “enough is enough”

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911Set Up to Fail?

Manzoni, 2002; Manzoni & Barsoux 1998

� The act of labeling someone as a poor

performer can sometimes lead to even worse

performance

� According to these authors, a downward spiral

is frequently triggered by a manager’s

perception of an employee’s attitude rather

than the employee’s actual performance

� Focus on performance; not attitude!

� Framing training or counseling as an

“opportunity” can sometimes minimize this

from occurring

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911 Fundamental Attribution ErrorManzoni (2002), page 118

� Most people unconsciously tend to overestimate the effect of a person’s stable characteristics – the individual’s disposition and capabilities – and underestimate the impact of the specific conditions under which a person is operating

� People are more prone to committing the fundamental attribution error when they operate under demanding conditions

� People can better distinguish the impact of situational forces when we have time and energy to spare than when there are multiple demands on our attention

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911 Consistency

� Consistent enforcement of policies, both

written and unwritten, is extremely

important for success in court� Glynn & Marshall (2005)

� Consistent ratings across raters and

those being rated is important

� Hold all employees in the same position to the

same performance standards

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911 Consistency

All employees performing the same job

should be compared against the same

standard in the same way

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911 Consistency

� Standards should be changed when justified

� Changes in standards should be documented

� If standards are changed, changes should be clearly communicated to all employees

� It would be helpful (i.e., more defensible) to obtain acknowledgement of the notification of the change

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911 Court Case in Point

� Santo v. Luzerne County Community College (2008)� A severe reduction in the employee's performance appraisal after she complained of discrimination was used as evidence to support her claim that employer’s proffered reason for terminating her was not credible, even thought she was fired seven months after her discrimination claim was made

� Courts have sometimes found sudden downward trends in appraisal ratings very suspect, unless employer can provide solid evidence of a non-discriminatory explanation of downward trend and there is no other evidence of discrimination

� Be extremely careful when evaluating employees who have taken an affirmative action against your organization (such as filing a claim of discrimination, harassment, or otherwise). Be consistent across employees

� We no NOT mean for you to overly lenient when rating these employees. Instead, provide sufficient documentation to show that your use of your rating criteria has not changed, but the employee’s performance did change

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911 What About Self Appraisals?

� Some organizations have employees generate appraisals of their own performance

� However, employees’ opinions may be different than management’s, so discrepancies should be addressed� Failing to address discrepancies can lead to a false sense of

adequacy on the employee

� It may also add to confusion if challenged in court

� Courts have generally ruled that self-appraisals on their own, especially if not endorsed by management, carry little weight

� However, as indicated previously, employees should be allowed to provide feedback and/or to be able to appeal appraisals management makes

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911 Knock Outs or Compensatory?

� Sometimes employees claim success in one area of performance should be allowed to compensate for failure in another area

� However, some jobs require employees perform competently in more than one area � See… that’s why we do a job analysis!

� If supported by the job analysis, it may be appropriate to terminate an employee who is performing poorly in one or more critical work areas, even if they are performing well in other areas

� Note: If Job Analysis indicates that below acceptable performance in a particular area cannot be compensated by performance in other areas, be extremely careful when computing “overall” job performance ratings

� In other words, averaging performance ratings may falsely give the impression of acceptable overall performance

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911 Due Process

� Employees and managers report greater

satisfaction with appraisal systems that takes

due process into account� Taylor, Tracy, Renard, Harrison, & Carroll (1995)

� Three characteristics of due process

� Adequate notice about the appraisal system

� There should be a fair hearing about the appraisal

� Judgments about appraisals should be based on

evidence about standards that is applied

consistently across employees

� Folger, Konovsy, & Cropanzano (1992)

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911 Interactional Justice

� When people are treated with interpersonal sensitivity, it indicates to those people that their dignity and intrinsic worth have been honored

� Treat employees, including those with performance issues or who are departing, with dignity and respect� Do not use pejorative labels such as “slow” or “deficient”� Such labeling can inadvertently send a message to other employees about how they organization expects those under scrutiny to be treated and evaluated

� Rudeness can undermine claims of impartiality by the employer

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911 Communicate Carefully

� Periodically communicate your organization’s

“at will” employment process, if appropriate

� Check handbooks and offer letters carefully

� Communicate disciplinary policies effectively

and follow them

� Be extremely careful when communicating

with others, including other employees, about

why someone is leaving your organization

� The courts have been skeptical when departing

employees are used as examples to others

� Noonan v. Staples, Inc., U.S. 1st Circ., No. 80-2159, 2009

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911 Hints

� Have a formal disciplinary policy

� Train supervisors on the policy

� Educate employees about the policy

� Enforce the policy consistency across all

employees

� Document any steps taken to enforce the

policy

� Maintain a “paper trail”

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911Peer Review &/or

360-Degree Feedback

� Obtaining appraisal information from multiple sources, such as supervisors, other employees, and even other stakeholders, may be useful for some purposes

� Make certain all raters have an opportunity to view the employee’s behavior� Raters should be not allowed to rate behaviors they have not

witnessed

� The Raters should be informed of the purpose of the appraisal

� Train all raters on the process, including the rating dimensions and rating scales

� Some researchers suggest if a 360-degree feedback system is used, that a more traditional “top-down”appraisal also be conducted

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911Peer Review &/or

360-Degree Feedback

� Peer reviews and 360-degree feedback

may work better for performance or

employee-development purposes than

for pay issues

� It might be helpful to conduct analysis of

the raters’ level of agreement

� If there are discrepancies between ratings

by various performance appraisal raters,

examine those discrepancies to determine

whether the issue is performance or

personality related

� Re-train or eliminate discrepant raters

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911

� Begin to institute your behavior-based performance appraisal system now!� Systems that are put into place to address a specific problem with a specific employee have been challenged in some instances

� Create and/or customize performance appraisals to address the job as it is performed at your organization

� Pilot test your evaluation process before expanding to entire workforce

� Conduct evaluations on a regular basis

� Eliminate any offensive language in materials you provide

Hints

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911

� Watch what you say, even in jest

� Obtain written waiver from departing

employees, if possible

� Be efficient

� Judges and juries may wonder by a ‘problem’

employee was retained for so long

� Have all documentation in place before

terminating an employee (if possible)� Tomlinson & Bockanic, 2009

Hints Regarding Termination

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911 Summary Points

� You do not need to continue to employ

those who cannot perform the job

� You should use an evaluation process

based on a job analysis

� Your evaluation standards should be job

related, fair, and consistently enforced

� Treating employees with dignity and

respect has many benefits and virtually

no “down side”

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911

Thank You

Should you have any questions please email me at jkuthy@biddle.com

or

call me at 800-999-0438

I hope you found this presentation helpful…

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911

� Barrett, G. V., & Kernan, M. C. (1987). Performance appraisal and terminations: A review of court decisions since Brito v. Zia with implications for personnel practices. Personnel Psychology, 40(4), 489-503.

� Cascio, W. (2005). Applied Psychology in Human Resource Management (6th ed., with H. Aguinis). (2005). Englewood Cliffs, NJ: Prentice-Hall.

� Folger, R., Konovsky, M., & Cropanzano, R. (1992). A due process model of performance appraisal. In B. M. Staw & L. L. Cummings (Eds), Research in Organizational Behavior (Vol. 14, pp. 129-177). Greenwich, CT: JAI Press.

� Glynn, C. L., & Marshall, Q. E. (2005). Avoiding a “pounding” in employment litigation: A few ounces of prevention. The Psychologist-Manager Journal, 8(2), 121-130.

� Goldberg, A. C. (1997, December). Top 8 legal issues affecting HR. HR Focus, 74(12),S1-S3.

� Manzoni, J. F. (2002). A better way to deliver bad news. Harvard Business Review, 80(9), 114.

� Manzoni, J. F., & Barsoux, J. L. (2003). The set-up-to-fail syndrome. Harvard Business Review, 76(2), 101-113. Noonan v. Staples, Inc., U.S. 1st Circ., No. 80-2159, 2009.

� Santo v. Luzerne County Community College. (2008). U.S. District Court, M.D. Pennsylvania, 3:CV-05-2463.

� Taylor, S. M., Tracy, K. B., Renard, M. K., Harrison, J. K., & Carroll, S. J. (1995). Due process in performance appraisal: a quasi-experiment in procedural justice. Administrative Science Quarterly, 40, 495-523.

� Tomlinson, E. C., & Bockanic, W. N. (2009). Avoiding liability for wrongful termination: “Ready, Aim, ...Fire!” Employee Responsibilities and Rights Journal, 21, 77-87.

� Werner, J. M., & Bolino, M. C. (1997). Explaining U.S. Courts of Appeals decisions involving performance appraisal: Accuracy, fairness, and validation. Personnel Psychology, 50, 1-24.

Selected ReferencesCheck with your College or University Library